Late last year, Judge Jeffrey Sprecher upheld the family’s right to sue, finding the arbitration agreement “unconscionable” because it was presented to Brown at emotionally difficult time; consisted of long, confusing passages; improperly portrayed the deal as beneficial to all parties; and included a confidentiality provision that Sprecher said was “designed to bury all proof of bad things that may be alleged to occur in a nursing home.”
The sad reality is that these types of arbitration agreements are fairly common now among nursing homes, and they are often upheld by the courts. Prospective residents, who may be in the midst of a health care crisis, are asked to forfeit their right to sue as a condition of admission. As the judge in the Esther Brown case ruled, these binding arbitration agreements are sometimes “forced down the throat” of residents.
As Sprecher pointed out, these agreements also attempt to “inject fear in the patient by suggesting that a court action takes so much longer than arbitration, so that unless you select arbitration, the patient may die before his court case could be finished.”
At first glance, arbitration might sound like a reasonable, effective way to address complaints without resorting to litigation. The problem is that through litigation, complainants have the ability to use the discovery process to procure documents that speak to patterns of abuse or neglect. They can also subpoena witnesses for depositions, and secure sworn testimony as to the facts of the case. And all of that is handled through a public proceeding before a judge or a jury of one’s peers.
Many of the arbitration agreements restrict a complainant’s access to records, as well as the number of depositions and witnesses. Some place limits on how much a party can recover in damages.
The federal government could easily bar these types of mandatory agreements as a condition of a home’s participation in the Medicaid program — but it has repeatedly refused to do so. In fact, the federal Centers for Medicare and Medicaid Services is considering major changes in nursing home regulations, but under the proposed new rules, homes will only be required to “explain” arbitration agreements to residents.
Of course, many individuals are placed in nursing homes precisely because their cognitive abilities are greatly diminished. How many of them are in a position to understand the legal rights they are forfeiting by signing these agreements?
Fortunately, CMS says it is still considering whether it should simply prohibit binding arbitration agreements altogether, noting that residents who depend on nursing homes for urgently needed care may feel pressured to sign the contracts even when they’re not required as a condition of admission.
It’s time for CMS to ban arbitration agreements in nursing homes. If care facilities feel that’s an intrusion on their right to dictate the terms of admission, they’re free to bow out of the Medicaid program and accept only private-pay residents.
But as long as public money is paying for the care provided in these homes, the regulation of these facilities should be designed to protect the public and not to appease the industry.
